Weekly Watchlist Jan 05
The US Captures Venezuelan President Maduro
Welcome back to another Weekly Trade Plan with The Dividend Journal! If this is your first time here, great timing. This newsletter is your one stop briefing to stay ahead of the market and step into the week fully prepared.
🎯 Initial Thoughts + TLDR
I hope everyone had a fantastic new years celebration, it was super weird to me since it was in the middle of the week but it was still nice time off!
To kick off the year, the US has captured the Venezuelan President Nicolás Maduro and is currently being held in NY for federal charges of narco-terrorism and drug trafficking. This is monumental in terms of on the global stage since we as a country technically stepped into a foreign country and displaced the governmental structure. On the global stage, the US faces criticism of “overstepping” and countries like China are demanding the US to release Maduro.
It’s important to note that Venezuela has one of the largest proven oil reserves in the world. But, under Maduro’s rule, the oil industry in Venezuela collapsed and crude production actually fell. Maduro also built oil alliances with China, Russia and Iran and so flipping Venezuela back to the West would not only be a huge oil play but also help companies like XOM 0.00%↑ and CVX 0.00%↑. It’s possible that the US is planning to unwind some oil sanctions in exchange for government reforms to increase oil production. The potential play from this, assuming negotiations play out favorably, could be the companies that build the infrastructure for drilling and oil. I’m thinking of companies like FANG 0.00%↑, HAL 0.00%↑, and WMB 0.00%↑.
The other parts of Venezuela that most people aren’t focusing on are Iron and Gold. Venezuela has the 12th largest iron ore reserves in the world and the country also holds 161 metric tons of gold reserves.
Given the fact that Bitcoin is rising post-Venezuela, I am inclined to believe we won’t have any crazy gap down reaction Monday on the overall markets. Future negotiations and if any other foreign power influence may cause more volatility this week.
📅 Key Earnings & Economic Calendar
Monday, January 5: ISM Manufacturing PMI
Wednesday, January 7: JOLTS, ISM Services PMI
Thursday, January 8: Unemployment Claims
Friday, January 9: Non-Farm Employment Change, Unemployment Rate, & UoM Consumer Sentiment
📈 Market Update: As of Friday, Jan 02
SPY 0.00%↑: After the lofty drift into new ATHs to close out 2025, the overall market has pulled back into the range again. Friday’s price action saw us go green to red and then back red to green. We technically had a great defense of the daily 21EMA, but I am still leaning towards a rocky start to the new year just like in Jan/Feb of 2025.
Historical data has also shown year 2 of the presidential cycle tends to show early chop and weakness leading to a end of year rally. We have a lot of strength in smaller cap names like LRCX 0.00%↑, LUNR 0.00%↑, RKLB 0.00%↑ and ASTS 0.00%↑ while large caps like NFLX 0.00%↑ and META 0.00%↑ continue to drag. It seems like we will continue to get run ups as earnings are coming up for a lot of these mid cap names. Post earnings, after February, is probably when we can see some more buying flow into large cap names.
Bitcoin:
It’s really interesting that we see a inverse relationship with metals and cryptocurrency. Because of the potential oil supply injection and leading to crude dropping price a bit, Bitcoin has seen some buying pressure and price is starting to present potential bottoming action. Bottom action is usually shown through high volume buying pressure and ignoring potentially negative news. We have also finally got multiple daily closes above the daily 21EMA, which has proven to be heavy resistance from all the wicks.
But, the ultimate confirmation for reversal is still a push past 94K and closes above. That should put us in a situation where the EMAs have flipped back bullish as well.
